Vietnam still expects GDP in 2022 to increase by 6-6.5% as production is recovering

A wholesale market in Hanoi

Vietnam, Southeast Asia’s fastest-growing economy, reaffirmed it will achieve its GDP target of 6.5 percent growth in 2022, although growth in the first quarter was slower than expected due to the impact of the COVID-19 pandemic. The Bloomberg network on March 29 cited the opinions of Mr. Le Trung Hieu, head of the GDP Department of the Vietnam National Statistics Office.

Mr. Hieu said that the gross domestic product will increase by 6% to 6.5% in 2022 when manufacturing will be the main driver for development, leading to the development recovery of tourism, construction, and other industries.

Mr. Hieu affirmed that in context that Vietnam’s GDP in the first quarter this year grew at a slower rate than expected 5.03% compared to a year earlier. However, according to Mr. Hieu, economic activity will develop in the remaining three-quarters of the fiscal year, thanks to a significant increase in vaccination levels against COVID-19. Mr. Hieu added that the best scenario is that growth will hit 6.5% if the Russia-Ukraine conflict is resolved.

Khoon Goh, head of Asia research at Australia & New Zealand Banking Group in Singapore, said: “Vietnam’s economy was severely disrupted last year by the Covid-19 pandemic, but has already started to recover to a normal level.”

We expect growth to pick up at a faster pace from the second quarter,” Khoon Goh was quoted by Bloomberg.

Vietnam’s highest legislative body National Assembly in January approved a stimulus package worth about VND347 trillion ($15.2 billion) to get the economy through the COVID-19 disruptions and bring growth back to 6%-6.5% this year.

The statistics office said consumer prices rose 2.41% in March from a year earlier, compared with the government’s target of capped inflation at 4% this year.

Ms. Nguyen Thu Oanh, Director of the Price Statistics Department under the General Statistics Office, said: “Inflationary pressures are increasing due to high oil prices, which has increased costs in many fields and industries.”

The COVID-19 pandemic and rising feed prices have had a big impact on agricultural production, which accounted for 10.9% of GDP this quarter,” said Ms. Oanh.

However, according to Ms. Oanh, the domestic price level is still basically under control, but inflation pressure in the remaining months of the year is quite large.

Translated by from RFA: